r banks in Hungary safe ?

Hi!
I don't think banks in Hungary are especially unsafe, but again, depends what you compare with. I guess, local branches of large foreign banks (Citi, Unicredit, all the Austrians) are safer than Hungarian banks. Among the local banks, OTP is sizeable, it is already a regional player, unlikely to collapse.
There were one or two examples of bank collapses during the nineties (Posta bank), but I actually do not know if people really lost their savings [I'd say, that would be extreme here]. The plague of collapsing banks has actually avoided Hungary in this crisis (so, the government tries to scapegoat them).

A customer depositing, say, a 100k EURos (30Mio Ft) will be very much welcome, probably qualify as a 'private banking' customer, but it is not an exceptional amount in the business world.

E.g. Citibank has a 'gold customer' service for accounts above a few Mio Huf which is pretty good, e.g. free cash withdrawal in all machines, special credit card, multiple sub-accounts (in different currencies, and, most importantly, a coffee! I can hardly imagine Citi collapsing (one of the largest players), or letting its Hungarian branch down - too much damage.

But reality has sometimes more imagination than most of us:-)
In any case, Hungarian Forint is not the currency to keep your lifetime savings (even though we hope that the present EUR/HUF rate is exceptionally low). But you can have foreign currency accounts here with no problem, renting a safe for the golden nokia with diamonds is also possible.
[Btw, property market is really down now, so buying property for long term return seems a good idea - if you can invest significant amount of time and get hungarian speaking friends to act for you, please read the experiences of other expats in this forum from a few weeks ago. But having a network of connections and trustworthy people knowing the local customs seems to me unavoidable for any sort of 'investment', probably more so than in northwest-EU (=NWE ?) countries, but that surely does not surprise you:)]

All that said, my father told me a recent story when one of his friends wanted to suddenly withdraw larger amounts for his bussiness (I think more than the above quoted quantities) and it proved difficult for 'bureaucratic reasons' - our guess was, the bank actually had cash problems, and tried to delay the withdrawal. (I don't know the end of the story though)

fireroller wrote:

Hi!
I don't think banks in Hungary are especially unsafe, but again, depends what you compare with. I guess, local branches of large foreign banks (Citi, Unicredit, all the Austrians) are safer than Hungarian banks. Among the local banks, OTP is sizeable, it is already a regional player, unlikely to collapse.
There were one or two examples of bank collapses during the nineties (Posta bank),

I think OTP is (or was) owned by a Canadian bank, so likely to be safer than others.

Most of the other regional banks like Raiffeisen are very exposed in Eastern Europe to bad loan books.

If a subsidiary bank goes down, it could quite easily cause a run on banks across the whole region and bring down their parent banks.

Hungarian banks are no different to any of the other banks across the region in that they are all exposed.

And of course, 100K EUR deposit insurance per bank applies for EU banks. But I would think any bank failing would be immediately nationalised.

The 100k state deposit guarantee is provided by the "OBA", Orszagos Betetbiztositasi Alap. The catch is they refund your frozen balance in HUF, which might result in a significant loss. So I would say if you intend to keep money in HUF, Hungarian banks should be perfectly safe. If in other currencies, there is a theoretical possibility of forced conversion losses in case the bank goes bankrupt, but since this has never happened so far, it is hard to calculate the actual probability and how it actually goes.

OTP seems to have very good relations to both political parties, receiving favors under both governments, so they should be safe from intentional government harm, but might also be immune from prosecution in case they wrong you. This is just my unfounded opinion, not legal or financial advice.

szocske wrote:

The 100k state deposit guarantee is provided by the "OBA", Orszagos Betetbiztositasi Alap. The catch is they refund your frozen balance in HUF, which might result in a significant loss. ...

That's good info. So actually, it's not 100K EUR as a deposit guarantee, it's 100K EUR equivalent.  It's the same in the UK, the amount is GBP 85K.

I guess what it means in practical terms is that one should keep money on deposit in an EU country where the national currency is what you want to insure (e.g. EUR in a country where EUR is national currency, GBP in UK, HUF in Hungary etc etc).